‘The people demand social justice” – I can hear the rhythm of the chant of the masses along the route from the tent encampment on King George Street in Jerusalem to the prime minister’s house. The beat, the words – “the people demand….” so reminiscent of the sounds of Tahrir square in Cairo or Tunis a few months before. The Arab spring has arrived in Israel – unbelievable!

I remember a conversation I had with an Israeli Jew some 33 years ago, when I told him I was going to live in the Palestinian- Israeli village of Kafr Qara and do volunteer community work for two years. He asked why I would want to do that. I said: “I think there are a lot of things worth learning about our Arab neighbors,” to which he responded: “what could we possibly learn from them?” “There is nothing the Arabs can teach us!” he asserted.

While I don’t recall many people being quite as blunt, I think the general Israeli Jewish attitude is that we really don’t have anything to learn from the Arabs.

I don’t know how many Israelis would say the Arab Spring has influenced the current “Israeli spring” of summer 2011, but I don’t recall any protest in Israel since the founding of Peace Now in 1978 (or perhaps the 400,000-people demonstration after Sabra and Shatilla in 1982) comparable to the energy, the anger and the belief that the public can make a difference as what we are witnessing now all around Israel. In Tunisia in several weeks of protest, the 23-year regime of Ben Ali was toppled. In Egypt it took 18 days to bring down a regime of 30 years. There is no direct comparison between the dictatorships of Tunisia or Egypt to Israel and its democracy, but it is quite clear that there must be real change in Israel, and not just cosmetic reforms as have been proposed so far by Prime Minister Netanyahu in his very Mubarak and Assad type public appearances so far.

What started out as a revolt against the price of cottage cheese has grown into a protest at the inability of young couples to find affordable housing, which has in turn attracted hundreds of thousands who are employed but poor.

ISRAEL DOES not face the budgetary threats of the US, Spain, Greece, or many other western nations. We have been told that the Israeli economy is a miracle, and OECD nations are coming to us to learn the secret. But for the average Israeli, the magic amounts to ending the month with a deficit that is not larger than next month’s expected income. Dual-income middle-class families cannot make ends meet, nor is there any hope on the horizon that their situation will change. I’m all too familiar with this situation. My difference is that our parents were capable of enabling us to getting a mortgage we could pay off, which we managed to do after 15 years. Now, even without the burden of housing expenses, we are forced to pay enormous amounts for insurance because the public health system is no longer sufficient. We are burdened with high costs for education because public education is dearly lacking. The price of food keeps rising; public transportation is inefficient and not accessible. Owning a car is outrageously expensive, and our salaries have decreased in real terms.

All this is the result of the economic system generated by Binyamin Netanyahu and people who share his Thatcherist economic views – i.e. privatize everything in sight. Natural resources, transportation, education, public housing, welfare, health, public land, you name it…. “privatize it” is the Netanyahuian school of economic policy. This is why in Israel today the gap between rich and poor is second only to that in the US. Israel, which 30 years ago was one of the most egalitarian societies in the West, is today one of the least.

When our leaders, policy makers and the “boys” in the Finance Ministry tell us how strong the economy is, they talk in dollars per capita. “According to the World Bank, the GNP of Israel is $27,040 per capita – i.e. almost three times higher than in Russia, twice as high as Poland or Saudi Arabia (with all its oil), almost $10,000 higher than in Portugal, and only slightly less than the GNP per capita of Spain.”

Wow – how wonderful.

Let’s see, I have three kids, my wife and I – that’s five people x $27,040 – that’s $135,200!!! I’m rich! In 10 years I will be worth $1,253,000! (and in shekels, that makes me a multi-millionaire). But of course that’s far from the reality most of us know.

I DO believe in the Israeli economy, and in our ability to be a prosperous nation with much greater social solidarity and much smaller gaps. I believe in the ability of Israel to provide the best possible health and education, and that our public welfare system could be not only the best in the world, but also the most compassionate. Our value system, based on our traditions and teachings, are the firm basis on which such an exemplary society could be built. The one aspect missing from the public discourse in the past weeks of protest is the inescapable conclusion that Israel’s economic health is based first and foremost on reaching peace with our neighbors.

It’s not popular to raise this issue; it seems too divisive. As some of the speakers said on Saturday night, this is not about Left and Right, religious and secular, etc. etc. But, unfortunately, it really is. Israel will not meet its full potential until Jews and Arabs are equal here, and until Israel no longer rules over millions of Palestinians who reject that rule.

I was slightly encouraged when Aviv Geffen sang his most famous protest song “Until it is” with the words “let’s conquer the peace and not the territories,” and the crowd in Jerusalem cheered and applauded. Social justice will only be achieved when we achieve peace.

The writer is founder and co-director of IPCRI, the Israel Palestine Center for Research and Information. He hosts a weekly radio show in Hebrew on All for Peace radio, and is a voluntary columnist for The Jerusalem Post.